Experimental Evidence on the Negative Effect of Product Features and Sales Promotions on Brand Choice

Abstract

Sales promotions and product enhancements are commonly expected to increase a brand's sales, when they do not negatively impact its utility and cost. That is, the purchase probability of consumers who find the promotion or additional feature attractive will increase, whereas the purchase likelihood of other consumers will not be affected. In contrast, we propose that consumers, who perceive a new feature or promotion as providing little or no value, will be less likely to purchase the enhanced brand even when the added feature clearly does not diminish the value of the brand. Thus, a new product feature or promotion may decrease a brand's overall choice probability when the segment of consumers who perceive it as providing little or no value is large compared to the segment that finds the feature attractive. This prediction was supported in three studies using actual promotions that have been employed in the marketplace (e.g., a Doughboy Collector's Plate that buyers of Pillsbury cake mix had the option to purchase for $6.19). We examined five alternative explanations for this effect. The results suggest that, when consumers are uncertain about the values of products and about their preferences, such features and premiums provide reasons against buying the promoted brands and are seen as susceptible to criticism. We discuss the theoretical and practical implications of the findings for segmentation, product, promotional, and pricing strategies.

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